Lesson 24-Government intervention

Question 1

State 4 reasons why the government may intervene in the labor market

Answer 1

1.To protect employees and employers
2. To prevent unlawful activities during the recruitment of employees
3. To reduce unemployment
4.To maintain standard of living
5. Provide education and training

Question 2

Define the national minimum wage

Answer 2

refers to the lowest possible wage that can be paid by an employer to an employee.

Question 3

Why does the government set a national minimum wage

Answer 3

To protect the interests of the workers and as they believe that the current wage is insufficient to meet the cost of living in a country

Question 4

What will happen to the quantity demanded of labor when a national minimum wage is set?

Answer 4

Quantity demanded for labor will fall since the labor cost has increased

Question 5

What will happen to the supply of labor when a national minimum wag is set?

Answer 5

The supply of labor will increase due to the increase in wage rate

Question 6

What is the outcome of NMW?

Answer 6

There will be an excess supply of labor causing unemployment